Smith & Wesson Holding Corp. said preliminary net sales for the fiscal fourth quarter ended April 30 were $179 million,
an approximate increase of 38 percent over the comparable quarter last year.
Preliminary GAAP net income from continuing operations is expected to be
approximately 44 cents per diluted share compared with net income of 27
cents per diluted share from continuing operations for the comparable quarter
last year.
The company ended the fiscal year with a cash balance of
$100.5 million.
Analysts on average were expecting a profit of 40 cents per share
with sales at $170.7 million, according to Thomson Reuters
I/B/E/S.
Preliminary net sales for fiscal 2013 year were $588 million, an approximate increase of 43 percent over fiscal 2012. Preliminary GAAP net income from continuing operations is expected to be approximately $1.22 per diluted share compared with net income of 40 cents per diluted share from continuing operations for the prior year.
Smith & Wesson also indicated that it had entered into agreements to sell to institutional investors $75.0 million aggregate principal amount of newly issued 5.875 percent senior notes due 2017. The notes will be issued in exchange for approximately $42.8 million aggregate principal amount of the company’s 9.50 percent senior notes due 2016. The transaction will result in net cash to the company totaling approximately $25.0 million.
The sale of the notes is expected to take place on or about June 17, subject to customary closing conditions.
The company’s board also approved the repurchase of up to $100.0 million of the company’s common stock. In December 2012, the company announced that its board of directors approved a program to repurchase up to $35.0 million of the company’s outstanding shares of common stock and the company subsequently repurchased 2.1 million shares for $20.0 million, utilizing cash on hand. The $100.0 million repurchase program announced today replaces the remaining $15.0 million authorized in December 2012.
James Debney, President and Chief Executive Officer of Smith & Wesson, said, “The successful execution of our growth strategy and strong balance sheet have allowed us to take steps to optimize our capital structure. With fiscal year 2013 results that exceeded guidance and $100.5 million cash on hand at the end of the fiscal year, we will recapitalize our existing debt on highly favorable terms, providing a capital structure that allows us to analyze opportunities for strategic investments. We believe that investing in our own company is presently one of our greatest opportunities. Thus, our Board of Directors has established a major stock buyback program, which, depending on the stock price and the number of shares purchased, could reduce our outstanding shares of common stock by approximately 15%. The debt exchange and the stock buyback program together are expected to be accretive, thereby increasing stockholder value while giving us financial flexibility to be strategically opportunistic.”